HII reports second quarter 2024 results

Credit: U.S. Navy

HII (NYSE: HII) reported second quarter 2024 revenues of $3.0 billion, up 6.8% from the second quarter of 2023, driven by growth across all segments.

Operating income in the second quarter of 2024 was $189 million and operating margin was 6.3%, compared to $156 million and 5.6%, respectively, in the second quarter of 2023. The increases were primarily driven by higher segment operating income compared to the prior year.

Segment operating income in the second quarter of 2024 was $203 million and segment operating margin was 6.8%, compared to $169 million and 6.1%, respectively, in the second quarter of 2023. The increases were driven by stronger results at Mission Technologies and Newport News Shipbuilding compared to the prior year, partially offset by Ingalls Shipbuilding results.

Net earnings in the quarter were $173 million, compared to $130 million in the second quarter of 2023. Diluted earnings per share in the quarter was $4.38, compared to $3.27 in the second quarter of 2023.

Net cash used in operating activities in the quarter was $9 million and free cash flow was negative $99 million, compared to cash provided by operating activities of $82 million and free cash flow of $14 million in the second quarter of 2023.

New contract awards in the second quarter of 2024 were $3.1 billion, bringing total backlog to approximately $48.5 billion as of June 30, 2024.

“Mission Technologies achieved another quarter of strong performance and robust growth, which has allowed us to raise our Mission Technologies revenue guidance range for the year,” said Chris Kastner, HII’s president and CEO. “Our shipyards achieved critical milestones during the quarter, delivering Virginia-class submarine SSN 796 New Jersey and LPD 29 Richard M. McCool Jr. We are pleased to reiterate our full year shipbuilding guidance and see meaningful opportunities for shipbuilding operating margin improvement in the second half of the year.”

Mission Technologies revenues for the second quarter of 2024 were $765 million, an increase of $120 million, or 18.6%, from the same period in 2023. The increase was primarily due to higher volumes in C5ISR and cyber, electronic warfare & space.

Mission Technologies segment operating income for the second quarter of 2024 was $36 million, compared to $9 million in the second quarter of 2023. Segment operating margin¹ in the second quarter of 2024 was 4.7%, compared to 1.4% in the same period last year. The increases were primarily driven by the higher volumes described above, a $6 million loss in 2023 on the sale of our interest in an unconsolidated ship repair and specialty fabrication joint venture, and stronger performance in fleet sustainment.

Mission Technologies results included approximately $25 million of amortization of purchased intangible assets in the second quarter of 2024, compared to approximately $28 million in the same period last year.

Mission Technologies EBITDA margin in the second quarter of 2024 was 8.5%, an increase from 6.7% in the second quarter of 2023.

Key Mission Technologies milestones for the quarter:

• Announced strategic executive leadership appointments to advance AUKUS goals in Australia
• Announced the sale of three REMUS 100s and five REMUS 300s to the U.K. Royal Navy
• Awarded $65 million to perform high quality specialized research and analysis for the Deputy Director of Joint Warfighting Development